WHAT IS BUSINESS AUTOMATION?
Business automation means leveraging technology to streamline and optimise your organisational processes and functions. Commonly referred to as business process automation (BPA), business automation enables a significant boost in your productivity by transitioning labour-intensive tasks into automated workflows throughout your entire business. Ken Goldberg, an American professor, artist and writer, gave us his take on the impact of business automation:
“Automation is the new electricity. It’s transformative, and it’s going to change everything.”
MANUAL INTERVENTION VERSUS AUTOMATION
Going a bit deeper, BPA serves as a catalyst for organisational advancement by fostering simplicity, driving digital transformation, enhancing service quality, optimising service delivery, and controlling costs. This comprehensive approach to BPA encompasses the integration of applications, the reallocation of labour resources, and the widespread utilisation of software applications across your entire organisational framework. Automated business processes entail delegating complex, multi-step operations, spanning several systems or departments, to software solutions for streamlined management and simplification. The range of automation possibilities is enormous, catering to the unique objectives, mission and vision of your organisation. For instance, tasks such as handling sales orders, managing customer relationships, overseeing vendor interactions, or facilitating employee onboarding, which traditionally rely on manual intervention, can all be effectively and relatively easily automated.
THE HISTORY OF BUSINESS AUTOMATION
While modern technology such as digital process automation is often perceived as a recent advancement, its roots trace back thousands of years. Ancient Greek engineers pioneered automated systems powered by compressed air, steam, and hydraulics. In the 1800s, mathematician Charles Babbage developed a large steam-powered calculator, laying the groundwork for further automation. Throughout the 20th century, significant progress was made in automation and process improvement, categorized into three phases. The first phase, emerging in the 1980s, witnessed the development of enterprise systems and methodologies like Lean and Six Sigma, enhancing manufacturing processes. The second phase, occurring at the turn of the 21st century, saw the widespread adoption of business process management systems, addressing integration challenges and improving operational efficiency. The third phase, digital process automation, has emerged in the past decade, enabling organizations to enhance customer experiences and automate intricate business processes.
HOW TO AUTOMATE BUSINESS PROCESSES
- Identify Your Processes – Identifying bottlenecks and potential improvements within your business operations serves as the foundation for automation opportunities. Start by pinpointing repetitive, time-consuming, or complex tasks across various aspects of your business, such as supply chain management, customer service, and procurement.
- Utilise Process Mining – Process mining software can significantly streamline the process identification step by swiftly analysing vast amounts of process data. This tool enables you to uncover any system restrictions but also automation possibilities across different processes, allowing for an in-depth understanding of dependencies, patterns, and areas for improvement. Process mining helps us identify so-called “happy paths” across supply chain, customer service, procure-to-pay or order-to-cash processes.
- Define Your Goals – It’s essential to establish clear goals for your automation initiatives. By defining specific objectives, you can effectively measure success, track progress, and identify further areas for enhancement. This step provides clarity and direction for your automation efforts, ensuring they align with your overall business objectives.
- Select the Right Automation Tool- Once you’ve identified areas for improvement and establishing goals, the next step is to choose the most suitable business process automation tool. Look for a tool that is user-friendly, adaptable to changes in operations, and capable of monitoring and achieving your automation objectives effectively.
EXAMPLES OF BUSINESS AUTOMATION
Here are three ways where business process automation will transform your core operational functions:
- Enhancing Customer Experience – Manual, customer-facing processes can hinder an organization’s ability to deliver optimal customer experiences. Automation can streamline operations, such as automatically responding to customer inquiries or routing support tickets to the appropriate department, ensuring prompt and efficient resolution of customer needs.
- Optimizing Inventory Management – Automating processes related to inventory management enhances operational resilience and reduces vulnerability to disruptions. Examples include automating communication with suppliers and distributors, monitoring inventory levels, and placing orders, all of which contribute to smoother inventory operations.
- Improving Sales Processes – In sales, speed is paramount to success. Business process automation can expedite lead management by automatically categorizing leads, initiating follow-ups, and reaching out to prospects within predefined timeframes. This streamlines the sales process, increasing the likelihood of securing successful deals.
BENEFITS OF BUSINESS AUTOMATION
Bill Gates had this to say about business automation:
”The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
And any outfit should take heed of his words as it ventures into the world of business automation. But business that automate well, can expect these benefits and possibly many more:
- More Efficient – Streamlining challenging and time-consuming tasks through automation enables swift and sequential handling, empowering employees to focus on their core competencies within the organization.
- Accuracy on Point – Human errors are inevitable, but automated processes provide guaranteed accuracy by adhering to specific rules established for handling business operations, effectively eliminating internal errors.
- Improved Employee Experience – Business process automation eliminates the need for employees to sift through scattered resources across multiple platforms, fostering effective communication and collaboration. With automated reminders and team updates, employees can concentrate on meaningful work, enhancing overall job satisfaction.
- Resource Savings – By automating repetitive tasks integral to operations, business process automation reduces the time, effort, and expenses associated with manual activities. This approach eliminates costs linked to errors and time-consuming processes, while providing valuable data to facilitate better-informed decision-making.
- Better Risk Management – Automation technology optimizes risk and compliance management processes, ensuring adherence to compliance standards and facilitating audits. By streamlining these processes, organizations can proactively address compliance requirements and make informed adjustments to operational areas, thereby minimizing risks and ensuring regulatory compliance.
DISADVANTAGES OF BUSINESS AUTOMATION
McKinsey & Company tells us that approximately half of all business processes are candidates for automation, but it’s important to exercise caution in implementing automation. Tasks requiring significant cognitive abilities are best left to personnel, as humans excel in weighing various factors like social norms, business context, and customer sentiment to make informed decisions. While workflow automation can be seamlessly integrated using ERP functionality, extensive automation efforts may introduce complexity into the enterprise. Although ERP vendors are incorporating AI and IoT technologies to enhance insights and streamline processes, overly ambitious automation projects could lead to convoluted IT projects and substantial investments in robotics, customisations, and additional features. Moreover, excessive automation may jeopardize the flexibility of business processes, rendering them overly rigid. Remember that businesses must also carefully assess how automation initiatives will impact the workforce, possibly putting jobs in jeopardy.
MANUAL IS LOSS-MAKING
Despite this surge in the popularity of automation, however, research reveals that UK businesses are still losing millions of pounds due to manual processing. The average loss for those without fully automated processes is over £10 million a year, while a staggering 28% of firms cited losses of £1 million or more. A leading technology consultant, Jani Van Hecke had this to say:
“Businesses often neglect the non-customer-facing part of their operation, so it’s no surprise that the manual processing of agreements is resulting in lost money and time for companies across the UK. This research highlights the true scale of the problem that outdated processes create and serves as a wake-up call to UK businesses.”
WHERE CAN YOU USE AUTOMATION?
McKinsey & Company conducted extensive research into where automation could be applied – their findings were quite eye-opening:
- less than 5% of occupations could be fully automated
- as a rule of thumb at least 30% of activities that are technically “automatable” today
- about 46% of time spent on work activities across industries could be automated with technology that exists today
- the cost of running an automated process is somewhere north of a 20% saving in back office costs
THE COST OF BUSINESS AUTOMATION
But how much does business process automation actually cost? Unfortunately, the answer is not so clear-cut. It will depend on the type of solution you choose, the number of users, and what processes you want to automate. With so many variables to consider, however, calculating costs can be somewhat confusing. Remember that the type of process automation software you need will depend on the tasks you need automated, including accounting, invoicing, sales orders and procurement processes. You’ll also need to factor in which software packages need licence and support – that could significantly add to your monthly bill. Technical difficulty also needs to be considered. Ideally, you’re seeking a workflow automation solution that offers low-code or no-code functionality, complete with intuitive visual wizards and rule builders. This ensures accessibility for everybody, regardless of their coding proficiency. As a ballpark, the cost for a workload automation solution can range from £25,000 to £200,000, depending on the complexity of your IT infrastructure.
PROCESS IT BETTER
If you are looking for affordable, intelligent and effective solutions to automate and digitally transform your business, you’re knocking on the right door. With Process IT Better, you can orchestrate any process, anywhere with our bespoke apps. Process IT better has been carefully crafted and developed to reduce manual effort and give teams better visibility, control and performance with a single solution. Let us help you accelerate your business by building and implementing the business apps you need, quickly and easily. With the ability to extend or customize the apps that you already use, Process IT Better also enhances productivity and innovation. Reach out today and get automated.
